German sponsors face soccer move head-on
Group against Kirch's pay TV planThe biggest sponsors of Germany's top soccer league — including Adidas, Coca-Cola, Siemens and Deutsche Telekom — have sent Leo Kirch a clear message: Keep your hands off Bundesliga football.
The league's 20 top sponsors have formed a lobbying group, dubbed S20 — the Sponsor's Voice, to fight any attempt to move Bundesliga matches off free TV.
S20 is the sponsors' response to Kirch's recent €3 billion ($4.27 billion) deal with the German soccer association. It gives Kirch the marketing rights for the Bundesliga for the 2009-15 seasons.
The €500 million ($712 million) per season Kirch agreed to pay represents a hefty €60 million ($85.4 million) mark-up on the league's current deal.
To recoup, Kirch will have to squeeze more cash out of German broadcasters. The easiest way to do that would be to move the Bundesliga off free-to-air TV and give it exclusively to pay TV channel Premiere.
Premiere already has said it is willing to pay more for soccer rights if it gets more exclusivity. Premiere estimates that it could add up to 1 million new subscribers if it had exclusive Bundesliga rights.
But that doesn't sit well with the league's sponsors. Currently, Bundesliga highlights air on primetime on public broadcaster ARD in top-rated soccer magazine Sportschau.
Adidas, Coca-Cola and the others see Sportschau as an ideal marketing platform. The free TV show reaches an audience of up to 6 million, millions more than subscribe to Premiere. For the sponsors, that means a mass audience watching their jersey logos, stadium banners and halftime commercials.
The sponsors group, which also includes carmaker Daimler, insurance group Allianz and German brewery Veltins, has threatened to pull support for the Bundesliga if Sportschau doesn't keep its privileged status.
"Our financial involvement is based on the current audience reach of the television broadcasts," said S20 chairman Christian Deuringer of the Allianz group.
That financial involvement is substantial. The S20 group says it pumps €400 million ($569.6 million) into the Bundesliga every year, almost a third of the league's total revenue.
The sponsors foiled a previous attempt to move the Bundesliga onto pay TV. In 2005, Premiere outbid all competitors for German soccer rights but insisted on exclusivity. Under pressure from its sponsors, the league balked and signed a less lucrative deal with cable group Unity Media.